Task Force For Corporation To Raise Road Funds

The West Bengal government's task force on infrastructure has recommended creation of a road development corporation for raising finances for the fund-starved road sector.

Significantly, the proposed corporation will not be under the control of the Public Works Department (PWD), but, headed by either by the Chief Minister or the deputy Chief Minister. The corporation will also enjoy the option of temporary take-over of any road, state highway or district road for reconstruction or repair in consultation with the PWD. The idea of such a corporation has been borrowed from Maharashtra for funding the state's critical road projects.

The report of the task force has just been released. Several task forces were formed by the West Bengal government as a key ingredient to bring about rapid industrialisation of the state through creation of necessary infrastructure.

 

Funds for the proposed corporation will be raised `from additional road tax, additional registration tax and a probable 2 to 3 per cent surcharge on petrol and diesel. This will do away with the necessity to levy and collecting toll on roads constructed by the West Bengal Road Transport Corporation (WBRDC)'.

The task force has recommended creation of a West Bengal Railway Development Corporation for development of railway land. State agencies and the railways can jointly work under the corporation.

Profits from railway land development can be used for development of road infrastructure. While the state and the railways will be given one third of the profit share, the other one third can be spent on mutually agreed schemes.

The task force has also recommended giving industry status to the road-building activity to attract private entrepreneurs. Some incentives, like meeting a part of the cost of feasibility studies, subsidy on purchase of heavy machineries, deferred payment of sales tax etc., may be given.

Additionally, licences may be given to private investors for development of roadside facilities such as petrol pumps, car repairing shops, garages, parking lots, restaurants resorts etc. Road development models followed in China and Malaysia can be studied.

The task force has also suggested an important procedural change for road projects under the PWD. Currently, all cases of project cost escalation by over five per cent need to be approved by the finance department. This takes four to six months. As the tenders are valid for four months, the work order too must be issued within that period. Given normal rates of cost escalation of projects, very few projects get started in time. The usual gap between tendering and issue of work orders is 12 to 18 months.

The task force felt that the referral to the finance department for cost escalation should be raised from five to at least 15 per cent.